Friday, 13 August 2010

Legal Eagles Vultures Laughing All the Way to the Bank Again

In the legal business, history repeating itself is not just a rule of thumb but appears to be an actual Law.

It should be called Suckers' Law or something similar, with an “equation” of the kind:

Whenever there is a dispute between two parties and lawyers on both sides are paid to achieve the best outcome for their respective parties (or clients), the ultimate beneficiaries are the lawyers and the ultimate losers are the clients.

There is a clear conflict of interest because lawyers will “downplay” their warning or advice to their clients against taking legal action (which in most cases is the best outcome, even though at the time clients may not be able to foresee this ... which is why they pay for legal advice in the first place!), despite the fact that lawyers clearly understand the elegant mathematical mechanics that play out in the fourth dimension [i.e. time] according to Suckers' Law.

This is at least the experience in Hong Kong. The latest example involves the grandly-named “Tutor King” Karson Oten Fan Karno (a Novel HKSAR Name) who took on his ex-employers in the public law courts.

Fan came to realize—rather belatedly—that he could no longer afford to pay for lawyers (see news article below).

Even Fung Shui Master Tony Chan Chun-chuen came to realize—and not through using his famed fortune telling skills—that his original lawyers were quickly bleeding him dry from his "pound of flesh". Subsequently Chan had to change lawyers and sell his assets to make ends meet (or rather to perhaps bleed slower), while the Inland Revenue remain hot on his heels for undeclared income and tax evasion.

Did these people’s lawyers really have their clients’ best interests at heart? History repeating itself. History repeating itself.

Fan - better known as "Tutor King" K Oten and one of Hong Kong's highest- earning English tutors - yesterday made the bombshell announcement that he has decided to apply for bankruptcy to terminate his debt.

"My son has just been born and I don't want to get entangled further in a lawsuit," he said.

"I am not only my family's pillar, but also father of a child. I believe I should put aside my personal honor and be responsible for my family."

He said he can no longer afford to pay for lawyers, adding: "I have been fighting alone with this big group [King's Glory Education Centre]."

Fan, in his 30s, starts a new job today with Cantab Education tutorial center.

He was ordered last year to pay King's Glory - his former employer - HK$8.87 million in compensation for breach of contract and recently lost an appeal to overturn the judgment.

Fan is also being sued by another tutorial center and was arrested for copyright infringement in another case, although he has not been charged.

In July last year, the Court of First Instance ordered Fan to hand over HK$8.87 million to King's Glory for breach of a five-year contract signed in 2003. He failed in his appeal in June.

He also faces litigation by Modern Education, which terminated his contract in January this year and sued him for more than HK$26 million.

According to Modern Education, Fan printed large advertisements on buses without consent from the company and falsely claimed to be "chief English tutor."

In May, Fan was arrested for suspected infringement of copyright of public examination papers along with seven others in a raid by customs officers on 14 tutorial centers run by Advanced Contemporary Education Centre.

Fan denied responsibility and said it is Advanced Contemporary that should clear copyright with the Examinations and Assessment Authority, not the tutors.

A Customs and Excise Department spokeswoman said Fan's case is still under investigation and refused to comment on his announcement of bankruptcy.

A lawyer, who would not be named, said that under the Official Receiver's Office, bankruptcy applicants have to execute the repayment order for four years.

The repayment depends on the applicant's financial ability.

"The receiver has to ensure a reasonable standard of living for both the applicant and the applicant's family," he said.

"The repayment amount, calculated based on the applicant's salary and existing assets, is the amount left after deducting reasonable living expenses."

The repayment could be waived after four years if the applicant performs well during the bankruptcy period, but uncooperative applicants may be ordered to prolong the bankruptcy period to a maximum of four years.

During the bankruptcy period, applicants are ordered to sell their cars, flats and other assets.

"In many cases, applicants would have to move to a simple flat, and not be allowed to live in a luxurious environment, or use luxurious goods," the lawyer said.

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Perhaps Thomas Jefferson said it best with: “Reason and free inquiry are the only effectual agents against error“. Much error exists in the world and this blog, from the perspective of one Hong Kong SAR resident, is a small attempt to minimize errors.
(this site was formerly HKSAR Blog)